UK Posts

Rooftop mounted PV: new trend for investors in the UK

Rooftop mounted PV: new trend for investors in the UK

As the UK is transitioning from the Renewable Energy Obligation scheme (ROC) to the Contract for Difference scheme (CfD) for large ground mounted systems (5MW+), investors are becoming increasingly investing in rooftop mounted PV.

CfD’s (Contracts for Difference): 5 things you need to know

Big changes have been anSolar_1nounced by the UK government regarding changes to the support machanism for large scale PV,  with the government moving from Renewable Energy Certificates (ROC’s) to CfD’s (Contracts for Difference). Below are 5 key aspects and considerations that should be in the mind of any PV professional operating in the UK.

 

 

Solar in the City: How urban community solar projects can both improve the lives of residents and offer future investment opportunities.

As the mercury rises across the capital, London’s tower blocks and estates are basking in the summer sun. But beyond the beer and BBQ’s, Councils and Housing associations across the UK are feeling increasing pressure from central government to make their buildings and housing stock more energy efficient. This stems from dual concerns regarding both the environment and the increasing cost of energy, a cost which comes directly from already stretched local authority budgets.

Tower Blocks offer a great opportunity for inner city solar PV energy production.

Tower Blocks offer a great opportunity for inner city solar PV energy production.

In response to this, several proactive councils and community organizations are beginning to install PV solar panels in order to meet this demand and reduce bills for both councils and residents. Under the governments Green Deal scheme, the Edward Woods estate in Hammersmith, West London received £16m in grants to upgrade its energy efficiency, this included installing a PV solar array on the roofs of the blocks to provide electricity to residents. This scheme has so far proved helpful in reducing bills for a largely deprived community, where a large proportion of residents would be described as in ‘fuel poverty’.

 A scheme across the city in Brixton is developing community funded solar PV installations that do not rely on council money or government grants, but instead rely on private investment from both the estate’s residents and external investors. Its mission is to create ‘cooperatively owned renewable energy projects’ that benefit the community, bring down the peoples carbon footprint and substantially reduce energy bills. Run as a not for profit ‘Brixton Energy’ already has three sites across the area and is seeking investment to expand further. As a community project Brixton Energy seeks to benefit from the governments reformed FIT rates, these give higher rates to community owned energy projects that produce over 10 Megawatts of power. Investors also benefit from the governments Seed Enterprise Investment Scheme (SEIS) which gives a 50% tax break to those investing in the scheme. This helps to encourage small scale investment in innovative community run projects.

 Although returns on these types of investments are small (estimated at 4%), harnessing private equity for these projects is crucial, and with the government’s continued support, these projects can benefit the communities involved and yield returns for investors. These schemes, both council and privately lead, also reduce the burden on peoples and the councils pocket by sourcing organised housing units’ power needs from renewable and sustainable technology. Although problems with this approach have been identified. An  article produced by the BBC states that ‘Shares (in community solar projects) may be difficult to sell, as there is no real marketplace to do so.’

 Source:BBC News, London School of Economics, Brixton Energy

 

Interview with UK’s Green Party Jason Kitcat

In May 2011, Jason Kitcat was elected member of UK’s first Green party led council administration. He represents the Regency Ward in central Brighton. Before being elected to Leader of Council, Kitcat was Cabinet Member for Finance & Central Services. He has been a Green city councilor for six years and a Green candidate for European Parliament in 2009. He is known for leading successful campaigns including his own by-election and the 2009 European Elections. His special interests include technology, politics, and the environment.

Milk the Sun is interviewing Jason Kitcat, Leader of Brighton & Hove City Council.

Jason Kitcat from UK

Jason Kitcat from UK

Milk the Sun: What are the Green Party goals for implementing renewable energy in the UK and how will you try to achieve these?

Kitcat: We already know that green industries are creating more jobs than any other part of the economy. So we believe that investing in renewable energy, in all its forms, would benefit the environment and create much needed jobs. We believe that instead of subsidising nuclear power and a dash for gas, government should be properly incentivising energy efficiency, new renewables plus retrofitting homes and offices.

Milk the Sun: How has the decrease in Renewable Energy Feed-in Tariffs (FiTs) impacted investment into renewable sources?

Kitcat: In Brighton & Hove the FiTs cuts had a significant impact on the council’s ability to move to a wide-scale roll out of solar panels. The uncertainty over government policy also made it incredibly difficult for the many solar businesses in this area to keep developing and attracting customers. Fortunately solar panel prices have kept falling so the business case for installing them is often still viable. As a council we are rolling out panels as best we can, but the finances aren’t as attractive as they were.

Milk the Sun: There are several community energy projects in Brighton such as the Brighton Energy Co-operative and the Brighton & Hove Energy Services that is making it easier for communities to get involved in renewables. How do energy projects such as these benefit the community and the individuals? Will there more projects coming up soon?

Kitcat: I think they are a fantastic example of the more democratic nature of renewable energy technologies. Communities can take local ownership and responsibility for energy generation, and reducing their carbon footprint. It’s also brilliant for children to see and understand what the renewable future can be like with panels and wind turbines going up around them.

The move to smaller scale local renewables isn’t just about devolving power (in all its meanings) but it is also an economic shift, like that from analogue to digital. We have exciting new co-operative and social business ideas like the ones you mentioned coming forward. They can viably compete with well established ‘factory’ model energy suppliers. These new groups are from their communities and often contribute back to their localities in many ways. I think we are going to see many more of these ideas blossom as renewable technologies continue to evolve.

Milk the Sun: There have been many new developments in solar technology such as better storage capacity and new materials like organics for solar panels that are sure to improve solar energy technology.  What kinds of technological innovations do you believe are essential for the future of solar energy?

Kitcat: Reducing cost, easing installation and ensuring reliability have to be key goals for renewable technology development. Often the business cases for installing solar depend on 25 year models, so we need to have confidence that the technologies will keep delivering as promised over that period and beyond. In Brighton & Hove we are seeing lots of innovation in this area, we recently hosted the second Eco-Tech Show and Conference in the city focusing on all the great developments in the field. The 2014 show promises to offer more insights into these innovations, see http://www.ecotechnologyshow.co.uk

Milk the Sun: What do you think are the possibilities and benefits that will come with initiatives in Europe and the North African deserts like Desertec and EU-MENA supergrids to provide renewable energy to the world?

Kitcat: Personally I’d prefer to focus on smaller scale, decentralised and local energy solutions. I’m yet to be convinced that these super-scale projects are the answer. There is also a risk that such projects could be exploitative and won’t actually meaningfully benefit the local communities in which they are being placed.

Milk the Sun: Solar energy is especially popular in Southern UK, will you expect to see that popularity extend to the rest of the UK? How are renewable energies perceived in the UK?

Kitcat: Technology always needs to be applied appropriately, and the same is true for renewables. There is no point putting up solar panels if they aren’t going to return a reasonable amount of energy. I certainly wouldn’t characterise renewables as being focused only on the South. Yes there might be more sun for solar down south, but there are viable spots for wind, solar and tidal across the UK. Ultimately we need to challenge the NIMBY (not in my back yard) attitude to installing renewables. A well insulated, energy efficient home is going to be more comfortable and cheaper to run. To me that should be an easy argument to make to those yet to be convinced.

Milk the Sun: What should the UK expect to see in regards to renewable energy in the next decade?

Kitcat: What I’d like to see is a far more significant switch to renewable energy and a radical programme of energy efficiency retrofitting. However I fear that the state of the current big three parties in central government means much of the drive and funding that could deliver these is being diverted elsewhere to things like new nuclear and gas exploration. That’s extremely disappointing but we shouldn’t give up the fight to change minds in government.

Milk the Sun would like to thank Mr. Kitcat for his interview. You can find out more about Jason Kitcat on his personal website and blog.

UK’s Draft Strike Prices Announced After Report Warning that the UK May Not Reach its Energy Goals

The UK government recently announced the strike price that large-scale solar projects can receive under its new Contracts for Difference scheme. This new scheme is part of the government’s Electricity Market Reform. The prices depend on the type of power being generated and guarantee that generators are paid a fixed sum or a strike price for the electricity they generate. Large solar generators (>1GW projects) will receive £125 in 2014 and £110 in 2019. However, other sources like hydro and biomass will receive the same amount from the 2014-2019 period.

The government confirmed this capacity mechanism will begin next year for existing generators and investors in new plant biddings through auctions for UK’s electricity demands. Participants that successfully bid will receive a payment in the year they agree to make capacity available. To receive payment, they must provide electricity during stress periods or else, a fine will be paid.

The idea behind the new strike prices is to make the UK energy market more attractive for renewable developers, to promote domestic business, to decarbonize the economy, and to reach the goal of over 30% renewable sources by 2020. Of course, there have been some varying opinions on the draft prices. UK’s Renewable Energy Association believes the draft prices are less than was expected and have omitted too much from biomass. While the trade group, RenewableUK, believes that the draft strike prices are a step forwards towards long-term market function. Maria McCaffery, the chief executive, states that although the prices could be challenging, it will be possible considering the shorter time period and in comparison to the Renewable Obligation Scheme. Investor confidence requires some time as well as the knowledge that government incentives for renewable energy are a long-term commitment.

Yet, most agree that there are still details that must be stamped out to overcome the uncertainty. One of UK’s largest utilities, RWE, adds that a lot of uncertainty remains including the need to receive EU state aid approval and the complexity of proposals.  Investor confidence depends on long-term support and certainty. When the final details are set, the UK will be able to see how UK energy investments change.

The announcement of the strike prices were announced soon after reports that stated there was a significant risk that the UK may not reach its renewable energy goals. The energy regulator, Ofgem, has done its second annual report on UK electricity capacity stating, “without action, risks to electricity supply could increase during the middle of this decade faster than expected.” The Committee on Climate Change has stated that although, the UK has made strong progress towards their 2020 emission targets, the report emphasizes that they must stay on track. New policies such as the strike prices should be developed and implemented to maintain UK’s renewable targets. If this does not happen, the risks and costs of moving to a low-carbon economy will rise. The Energy Bill must be implemented into the statute books as soon as possible. Charlotte Morton, chief executive of the Anaerobic Digestion and Biogas Association adds that the UK needs stronger coordination between relevant government departments that can provide harmonized policies that can support the nation’s carbon and energy targets.

Source: Greenwise Business, Power Engineering International (1), (2), Solar Power Portal

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